GM gives notice of weeklong layoffs early next year

9,000 to be furloughed at SUV, truck plants

October 28, 2004|By KNIGHT RIDDER/TRIBUNE

DETROIT - General Motors Corp. has told more than 9,000 workers at five plants that primarily make SUVs and pickup trucks that they will be laid off for a week or more early next year as the company continues to reduce production of its vehicles.

That is in addition to the indefinite layoff of 900 workers in Pontiac, Mich., disclosed by GM last week.

While the five plants are on shutdown, hourly workers will see their pay drop about 35 percent. The shutdowns will follow the normal holiday breaks .

GM spokesman Dan Flores said the cutbacks are a market-driven decision to bring production in line with "market forecasts and current demand," and he noted the automaker is also increasing manufacturing at some plants. Yesterday, GM said it will invest about $250 million in its Shreveport, La., truck assembly plant to produce the Hummer H3 SUV.

However, it's clear that demand for some of GM's most profitable pickups and SUVs - from Chevrolet Silverado and GMC Sierra pickups to Cadillac Escalades and Chevy Suburbans and Tahoes - is waning because they are at the end of their model lives. Rising gas prices may also be discouraging some consumers from buying bigger vehicles.

GM's decision to tell workers about production slowdowns more than two months before the start of the new year also seems to signal that the automaker is nervous about the coming sales year and its inventory levels, after reporting disappointing earnings in the third quarter.

The world's largest automaker is scheduled to announce its first-quarter production forecast in December. That's when the full scope of its cutbacks for the first three months of the year will become clear.

GM management has already told hourly workers about changes at two plants in Lansing, Mich., and plants in Pontiac, Mich.; Arlington, Texas; and Janesville, Wis.

Another plant in Oklahoma City will have extended down time in January, GM said.

Based on the UAW contract, employees must be selected for layoff according to seniority, so that workers with the least amount of time with the company would be the first to be laid off.

Under the UAW contract, workers who are temporarily laid off should get 95 percent of their normal take-home pay once unemployment and supplemental pay are combined. That amount is then taxed, which means workers would actually bring home 65 percent to 70 percent of normal pay. Some of those workers could also be moved into a so-called jobs bank, where they get full pay until they find a new job.